US Home Prices Slow to 0.7% Growth — Why Buyers Still Can’t Catch a Break

Cooling prices, stubborn affordability: the real estate USA update

The latest data show the real estate USA market is decelerating — but for would-be buyers the squeeze is not easing. Home price growth slowed to 0.7% year over year in February 2026 on the S&P Cotality Case-Shiller Home Price Index, down from 0.8% in January, yet affordability pressures remain intense.

That contrast is the story of this market: weaker price momentum alongside high borrowing costs, hefty down-payment requirements and rents that have not given households enough room to save. Our analysis looks at what the numbers mean for buyers, sellers and investors, and outlines practical steps people should consider before making a move.

What the headline numbers tell us

These are the hard facts pulled from the latest reports:

• National annual home price growth: 0.7% in February 2026 (S&P Cotality Case-Shiller).
• 10-City composite: +1.5% year over year.
• 20-City composite: +0.9% year over year.
• Monthly national price change: +0.3% in February, slightly above the 0.2% February average from 2015–2019.

Those figures show appreciation has slowed markedly from the rapid gains earlier in the decade. But slowed growth is not the same as improved affordability. Mortgage rates remain elevated compared with early 2020s levels, many homeowners are holding low-rate loans they are unlikely to give up, and the rental market is still making saving difficult for renters hoping to buy.

Regional winners and losers — what markets to watch

The national averages hide big local differences. Some cities are still seeing healthy price gains, while others are slipping.

• Cities with stronger annual price gains include Chicago (+5%), New York (+4.7%), and Cleveland (+4.2%).
• Cities showing declines include Denver and Tampa, each down by about 2% year over year.
• On the rental side, the biggest annual drop among large metros was in Austin (-5.7%), linked to heavy multifamily construction in some Sun Belt markets.

What that means for buyers and investors:

• If you are an investor, opportunities can exist where rents fall but supply is heavy — cap rates may be under pressure and tenant turnover could rise.
• If you are a prospective buyer, markets with falling prices may be where negotiation leverage is greater, but you must also check local employment trends and new construction pipelines.

Why sellers are reluctant — and why that could change

A major reason prices are not falling faster is that existing homeowners are often locked into mortgage rates from the early 2020s that are substantially lower than today's rates. Cotality's principal economist Thom Malone explains that this gives sellers the ability to wait for buyers to pay near their asking prices. But that patience has limits. Rising property taxes and insurance costs, or life events, can force a sale and prompt price cuts.

Two relevant data points from the release:

• Sellers relisted this spring after many sat out last year, and Cotality suggests that may push some owners toward price reductions.
• Despite the slowdown, demand has not vanished; prices rose 0.3% in February, above the pre-pandemic February average of 0.2%.

From my reporting experience, that is a fragile middle ground. Sellers holding low-rate mortgages can resist price cuts for a long time, but their sensitivity to carrying costs is growing. If enough sellers reach that breaking point, we could see more visible downward price pressure.

The buyer psychology problem: low expectations and slow return

Sentiment is tilted toward pessimism. Gallup finds that just 25% of non-homeowners expect to buy within five years — the lowest reading since the question began in 2013. Another 28% expect to buy within ten years, while 45% do not expect to buy in the foreseeable future.

The decline is most pronounced among younger adults. Among non-homeowners aged 18–34, only 29% in 2025–26 expect to buy within five years, down sharply from 57% in 2013–15.

This is not just an academic shift. Lower buyer expectations can feed into weaker demand and longer listing times, which in turn can put pressure on prices when those expectations collide with the reality of sellers who bought at much lower rates.

Down payments and the rise of financial assistance

For those who do buy, external financial help is increasingly a factor. LendingTree’s 2026 Mortgage Down Payment Survey shows that 40% of homeowners received help with the down payment on their current home, up from 35% in 2023.

Breakdown by generation:

• Gen Z homeowners: 78% received down-payment assistance.
• Millennials: 56% received assistance.

LendingTree also reports that 35% of those who received help said they could not have bought when they did without it. For those assisted:

• 43% said help enabled them to qualify for a mortgage.
• 33% said it reduced their monthly payment.

What this means: family transfers and gifts are underwriting a portion of buyer demand. That prop keeps segments of the market active even as broader affordability deteriorates.

Renting is not an easy alternative

Renters hoping to save for a purchase are facing mixed signals.